Green Home Building Continues to Climb Says New McGraw Hill Construction Study

February 12th, 2014 by Editor

McGraw Hill Construction, a part of McGraw Hill Financial, released findings from a new Green Home Builders and Remodelers Study at the National Association of Home Builders (NAHB) International Builders’ Show in Las Vegas. Green homes comprised 23 percent of the overall residential construction market in 2013 and are expected to grow to between 26 percent and 33 percent of the market by 2016. This equates to a doubling in the value of green home construction over three years, growing from $36 billion in 2013 to $83-$105 billion in 2016, based on the current McGraw Hill Construction forecast for total residential construction.

The study shows that the top drivers to increased green home building activity include changes in codes and regulations, better quality, wider availability and affordability of green products, energy costs and competitive advantage.

The study reveals business benefits afforded by green building:

  • Competitive marketing advantage: 51 percent of builders and remodelers find that it is easier to market green homes, up from 46 percent in 2012 and 40 percent in 2008.
  • Customer willingness to pay for green features:
    • Sixty-eight percent of builders (up from 61 percent in 2011) report their customers will pay more for green, with 23 percent reporting that their customer will pay more than 5 percent.
    • Eighty-four percent of remodelers report the same (up from 66 percent in 2011), with 55 percent reporting their customers will pay more than 5 percent for green features.

In 2013, 16 percent of builders were dedicated to green building with more than 90 percent of their projects green, and another 20 percent were highly invested in green activity with 61 percent to 90 percent of their projects green. By 2015, that is expected to increase, with 20 percent of builders expecting to be exclusively working on green buildings, and 24 percent doing 61 to 90 percent green work. Remodelers are also increasing their attention to green work, with 16 percent reporting more than 60 percent of their projects are green today, expected to grow to 23 percent doing this amount of green remodeling in 2015 and 32 percent by 2018.

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